Report shows that gender gap is getting wider

Giving a sneak preview of data in the upcoming 10X Investments’ Retirement Reality Report, Mica Townsend, Business Development Manager at 10X, warned that the report would show that the gender gap is getting wider when it comes to saving and investing for retirement across all key areas surveyed.

“We had hoped that the report released last year would motivate women to act to start closing the gender gap, but we have been disappointed. Things have actually been getting worse,” said Townsend.

As if the decline against data for men wasn’t depressing enough, added Townsend, there are a number of reasons that women should be working harder to prepare for retirement, not least among them the fact that women live longer than men on average.

“Women need to do more than play catch-up with men in the investment arena. They really should be in a stronger financial position than men to face the additional challenges typically faced by women. In addition to longer average life expectancy, other factors that make women more vulnerable financially than men include taking career breaks when they have children as well as taking care of elderly parents.”

The second annual Retirement Reality Report (RRR2), which is due to be released by the disruptive asset manager in early September, will show that 72% of women either don’t have a retirement plan at all or are unsure of its value, against 63% of men saying the same thing.

The RRR2 will paint a bleak picture for the future of South Africans across the board, but the data for women is particularly worrying.

“We had hoped that our first Retirement Reality Report would mark a low point in South Africans’ preparedness for retirement, and shock people into action but looking at the data for RRR2, which is coming out in a few weeks’ time, things are not improving at all and we need to take a hard look at why,” said Townsend.

The RRR2 will show that 42% of South African women say they don’t save or invest at all. Metrics that are getting worse include that even fewer women reported investing their savings in order to grow their wealth, down to 13% from 16%.

Women might be catching up with their male peers in terms of rights and responsibilities in the workplace but they continue to lag when it comes to long-term saving.

“This is very worrying,” says Townsend, “since it will potentially have a big impact on their dignity in retirement, and hence threaten a lot of gains delivered by the fight for equality.”

Despite all the progress made in the struggle for equal rights, studies continue to show that women earn salaries that are significantly lower on average than their male counterparts. If the retirement gap is to be narrowed, it is crucial for women to focus their attention on financial affairs beyond equal pay and take full responsibility for their own financial needs, adds Townsend. “Although it is vital to bridge the equal pay gap the matter is much bigger than achieving just this.”

Another reason women tend to save less is that they are frequently feel less comfortable than men talking about finances and often have a belief that they will not understand the products and processes involved. Townsend’s suggestion here is to keep it simple.

“Saving for retirement is actually very simple, a lot easier than, say, choosing the right school for a child or struggling with food allergies. One key to mastering saving and investing is to choose a retirement fund provider that does not complicate the process and to select a platform where transparency, over such things as what fees you pay, is paramount.

Townsend urges women to jump in and start saving as soon as possible, even just a small amount each month. It will soon become a habit, she says, and your savings will start to build up. “After just a short while of putting away a little each month, it will soon become habit, as natural as any other routine activity.”

“All the while,” Townsend adds. “You will be letting compound interest work in the background and growing your nest egg year on year.”

Download the first 10X Retirement Reality Report here. The second one will be released via the 10X website in early September.

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